ABSTRACT
This chapter explores interregional models of amenity valuation. There are three underlying assumptions that form the foundation for both the intra- and interregional hedonic models. The models assume that: residents are knowledgeable about the level of site characteristics across locations; there is a continuous offering of site characteristics such that utility maximizing sorting between locations is possible; and residents are mobile between locations with zero transactions costs associated with relocations. The chapter investigates the issue of incomplete amenity capitalization. The measures of incomplete amenity compensation are at the metropolitan level, whereas migration data is for metropolitan counties. The coefficients on the fixed effects reflect the capitalization of amenities, fiscal goods, as well as disequilibrium effects reflecting incomplete compensation for the amenity. A quality of life index was computed as the sum of each amenity level times its implicit price.
